A manufacturer has planned his level of operations at 50% of his plant capacity of 30,000 units. His expenses are estimated as follows, at 50% of the plant capacity utilization:

The expected selling price in the domestic market is Rs. 2 per unit. Recently, the manufacturer has received a trade enquiry from an overseas organization that is interested in purchasing 6,000 units at a price of Rs. 1.45 per unit.

As a professional Management Accountant what would be your suggestion regarding acceptance or rejection of the offer? Support your suggestion with suitable quantitative information.

Answer rating: 100% (QA)

Heres a breakdown of the situation and a recommendation for the Management Accountant considering both quantitative and qualitative factors Quantitati... View the full answer